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What Is Worrisome About This Stock Market, And Where Readers Might Find Value

Brian Gilmartin, CFA profile picture
Brian Gilmartin, CFA

Two items read this week were a little worrisome:

1.) Liz Ann Sonders, Schwab's great strategist, posted this to Twitter on Thursday:

During most of this secular bull market, sentiment has been a mixed bag, with the AAII data being perennially bearish to the point where some wonder whether it is even worth measuring the data, while the "newletter" writer crowd and more institutionally minded have been pretty bullish.


Bespoke's "stale breadth" post on the evening of November 2nd was somewhat surprising given that "good breadth" has been a hallmark of this rally all year.

3.) While ready to post this column, Horan Capital posted a piece by SeeitMarket, accompanied by a graph of breadth and momemtum:

Consistent with the weakening breadth argument this past week was that while the Nasdaq Composite and the QQQ's were up over 1% on the week, the Russell 2000 as measured by the IWM was down 80 bps on the week.

If small-caps weaken or even stay flat, and large-cap Tech or the Big 10 of the S&P 500 continue their year-end rally, breadth will continue to flag, and the indices will continue to move higher.

Where Might Value be in Today's S&P 500 ?

1.) Technology and Financials were the bull market leaders of the 1980s and 1990s, and the two sectors that led to 50% corrections in the 2000s. Obviously, there are the secular growth stocks of this bull market that are Facebook (FB), Netflix (NFLX), and what I call the "tweener" Tech stocks that spanned a little of both decades, like Amazon (AMZN) and Google (GOOG, GOOGL), but look at some of what i refer to as the "original gangsters" or the 1990s growth stocks that are working off 17-year bases and could be poised

This article was written by

Brian Gilmartin, CFA profile picture
Brian Gilmartin, is a portfolio manager at Trinity Asset Management, a firm he founded in May, 1995, catering to individual investors and institutions that werent getting the attention and service deserved, from larger firms. Brian started in the business as a fixed-income / credit analyst, with a Chicago broker-dealer, and then worked at Stein Roe & Farnham in Chicago, from 1992 - 1995, before striking out on his own and managing equity and balanced accounts for clients. Brian has a BSBA (Finance) from Xavier University, Cincinnati, Ohio, (1982) and an MBA (Finance) from Loyola University, Chicago, January, 1985. The CFA was awarded in 1994. Brian has been fortunate enough to write for the TheStreet.com from 2000 to 2012, and then the WallStreet AllStars from August 2011, to Spring, 2012. Brian also wrote for Minyanville.com, and has been quoted in numerous publications including the Wall Street Journal.

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